Case study - Bosna RE
Case study - Bosna RE
Case study - Bosna RE
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g<br />
ERC Frankona<br />
<strong>Case</strong> Study<br />
Canned Fruit Company
g<br />
ERC Frankona<br />
Canned Fruit Company<br />
This account has two locations. Location A is a fruit processing facility. The freshly picked<br />
ripe fruit is stored in a cold-storage warehouse that is two metres detached from the<br />
processing building. Location B is a warehouse situated on the other side of the village and<br />
containing the stock of canned and cartoned fruit. The following sketches show the layout of<br />
the buildings.<br />
Plant A<br />
BOILER<br />
HOUSE<br />
Brick<br />
OFFICE<br />
CONCR.<br />
OFFICE<br />
FRUIT P<strong>RE</strong>PARA-<br />
TION & CANNING<br />
STERILISATION<br />
FRUIT<br />
PEELING<br />
ST O RAGE<br />
CORRUGATED PLASTIC CANOPY<br />
METAL DECK ROOF<br />
(NON COMBUSTIBLE) ON STEEL<br />
OFFICE<br />
Brick PPRODUCTION Brick<br />
CONC<strong>RE</strong>TE FOUNDATION<br />
COLD STORAGE<br />
WA<strong>RE</strong>HOUSE<br />
FOR<br />
F<strong>RE</strong>SH RIPE<br />
FRUIT<br />
POLYU<strong>RE</strong>T H ANE INSULATED<br />
METAL ON STEEL<br />
WA<strong>RE</strong>-<br />
HOUSE<br />
LOADING DOCK<br />
ERC Frankona<br />
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ERC Frankona<br />
Plant B<br />
WA<strong>RE</strong>HOUSE<br />
METAL SHEET ON LIGHT STEEL<br />
CONC<strong>RE</strong>TE FOUNDATION<br />
At the end of the season, the warehouse is full and the stock is sold during the year, as the<br />
Sales table here below shows:<br />
Sales in 1,000 kg 1995 1996 1997 1998 1999<br />
1 st Quarter 2,000 2,000 2,500 2,000 2,000<br />
2 nd Quarter 1,000 1,000 1,500 1,000 1,000<br />
3 rd Quarter 10,000 10,000 13,000 11,000 10,000<br />
4 th Quarter 5,000 5,000 6,000 4,000 5,000<br />
Total 18,000 18,000 23,000 18,000 18,000<br />
The company is insured under a named perils property coverage for the two locations. It<br />
wishes a three month BI coverage. Deductibles are USD 20,000 for property and one day for<br />
BI. Anniversary is 1 January.<br />
ERC Frankona<br />
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g<br />
ERC Frankona<br />
Additional information can be found in the two following tables:<br />
Declared values for property in million USD<br />
Plant A Plant B<br />
Buildings 3 2<br />
Machinery 22 0.1<br />
Stock 0 20<br />
Total 25 22.1<br />
Sales price in USD/ kg<br />
USD/kg<br />
Raw Material 0,5<br />
Utilities 0.45<br />
Salaries 0.5<br />
Administration 0.2<br />
Production costs 0.4<br />
Taxes 0.33<br />
Profit 0.15<br />
Total 2.53<br />
Questions<br />
1. Are the property values adequate?<br />
2. What is the sum insured for PD ?<br />
3. What is the sum insured for BI?<br />
4. What is the EML for plant B?<br />
5. Are the deductibles acceptable?<br />
6. Was Canned Fruit underinsured in 1997?<br />
7. Could you help the insured avoid underinsurance in this case?<br />
ERC Frankona<br />
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